In the
name of the people
The
Presidency Council
Pursuant
to what was approved by the Council of Representatives
and endorsed by the Presidency Council and based on the
provisions of paragraph (First) of Article (61) and
paragraph (Third) of Article (73) of the Constitution,
the following law is promulgated:
No ( 13 ) of 2006
The Investment Law
Chapter
One
Definitions
Article (1)
The
following terms, wherever mentioned in this Law, shall
have the following specific meanings unless the context
indicates otherwise:
A.
The Council:
The Council of Ministers
B.
National Commission for
Investment:
The Commission established in accordance with this law
responsible for drawing up the national policy and
laying out its guidelines and monitoring the
implementation of these guidelines and instructions in
investment. It shall specialize in investment projects
of a federal nature exclusively.
C.
Region’s Commission:
The investment commission of the region responsible for
granting investment licenses in the region.
D.
Governorate Commission:
The
investment commission of the governorate not organized
in a region responsible for investment planning and
granting investment licenses in the governorate.
E.
The Commission:
The
National Commission for Investment or the Region’s
Commission or the Governorate Commission as the case.
F.
Chairman of the
Commission:
The Chairman of the National Commission for Investment
G.
The Project:
The economic activity subject to the provisions of this
law.
H.
The Assets:
The tools, apparatuses, equipments, machineries,
requirements,
gear,
transportation means and office furniture specified for
exclusive use in
the project, and
the furniture, furnishings and the requirements of the
hotels,
tourist cities,
hospitals, schools and colleges
I.
The Foreign Investor:
Is the investor who does not hold the Iraqi nationality
in the case of a real person, and is registered in a
foreign country in the case of a juridical or legal
person
J.
The Iraqi Investor:
Is the investor who holds Iraqi Nationality in case of a
real person and is registered in Iraq in the case of a
juridical or legal person.
K.
Taxes and Fees:
All types of taxes and fees levied in accordance with
the applicable laws.
L.
The designed production
capacity:
Is the production capacity designed within a specific
unit of time (hour, unit, day … etc) in accordance to
what is fixed in the documents incoming with the
machines of the supplier.
M.
Investment Portfolio: A collection of investments in
shares and bonds.
N.
Investment: Is the investment of capital in any economic
or service activity or project that results in a
legitimate benefit for the country.
Goals and Means
Article
2
This law aims at the following:
First:
To promote investment and transfer modern technologies
in order to contribute to the process of developing and
enhancing Iraq, and expanding and diversifying its
production and service base.
Second:
To encourage the Iraqi and foreign private sector to
invest in Iraq by providing the required facilities for
establishing investment projects and enhancing its
competitive capacities in the local and foreign markets
for projects included in this law.
Third:
To develop human resources based on market demands and
provide work opportunities for the Iraqis.
Fourth:
To protect the rights and properties of investors.
Fifth:
To expand
exports and improve the balance of payments and the
balance of trade of Iraq.
Article 3
The
following means shall be adopted to realize the
objectives of this law:
First:
To grant projects covered by the provisions of this law
the necessary privileges and guarantees for its
continuation and development by providing support in a
way that enhances the competitive capacities of these
projects in the local and foreign markets.
Second:
To grant projects that obtained an investment license
from the Commission, additional facilities and
exemptions from taxes and fees in accordance with the
stipulations of this law.
Chapter Two
The National Commission
for Investment and the
Investment Commissions
in the Regions and Governorates
Article 4
First:
A Commission shall be established and called the “The
National Commission for Investment”. It shall enjoy a
juridical personality and shall be represented by the
Chairman of the Commission or the person authorized by
him. It shall be responsible for drawing up the national
policies for investment and drawing up its plans,
regulations and guidelines as well as monitoring the
implementation of these guidelines and instructions in
investment. It shall specialize in strategic investment
projects of a federal nature exclusively.
Second:
The National Commission for Investment” shall be managed
by a Board of Directors comprised of nine members who
must be competent and specialized, and hold a college
degree that suits the specialty of the Commission. They
must not have been sentenced for a felony or misdemeanor
of moral turpitude, or have declared their bankruptcy
Third:
A.
Upon a request by the Prime Minister, the Council of
Ministers shall nominate a Chairman of the Commission at
a grade of Minister and a Deputy Chairman at a grade of
Deputy-Minister for a period of five years and present
them to the Council of Representative for approval.
B.
The Prime Minister shall appoint four members for a
period of five years at a grade of Director General.
C.
The Prime Minister shall select three members from the
private sector for five years after their nomination by
Chairman of the Commission and specifying their
compensations according to the bylaws.
D.
At the conclusion of the membership of any member of the
Commission referred to in Paragraph (A and B) of this
Article in cases not involving dismissal and
resignation, the Prime Minister shall assign them to any
governmental entity at the same grade. Those mentioned
in (A) of this article shall be retired on pension when
not assigned to a government position equivalent to
their grade.
E.
The Council of Representatives may directly dismiss the
Chairman of the National Commission for Investment and
his Deputy, or upon a request by the Prime Minister for
compelling reasons.
F.
The Council of Ministers may dismiss or replace any
member of the Commission or replace him with others in
case he does not adhere to the standards and regulations
of the Commission.
G.
The Board of Directors of the National Commission for
Investment shall meet at the invitation of its Chairman.
A bylaw issued by the Commission shall specify the
quorum, decision taking, making recommendations and the
course of work of the Commission and any other issue.
H.
The National Commission for Investment shall be
connected to the Prime Minister.
I.
The salary scale and entitlements of the Commission’s
employees shall be determined by a decision of the Prime
Minister based on a proposal from the Chairman of the
National Commission for Investment.
Fourth:
The
Commission’s headquarters shall be in Baghdad and it may
appoint representatives in the regions and
governorates.
Fifth:
The National Commission for Investment shall draw up an
overall national strategic policy for investment
identifying the more important of the sectors and shall
prepare a map of investment projects in Iraq in the
light of the information it receives from the regions
and governorates. It shall also prepare lists of
investment opportunities in strategic and federal
investment projects with initial information about these
projects and making it available to those wishing to
invest.
Article 5
First:
The regions and governorates not organized in a region
may form investment commissions in their areas. The
latter shall enjoy the powers of granting the investment
licenses, investment planning, promoting investment and
opening branches in their areas within the provisions of
this law in consultation with National Commission for
Investment to guarantee the availability of the legal
conditions.
Second:
the Investment Commissions of the regions and
governorates shall be composed of at least seven members
including the chairman and the vice chairman of at least
seven years of experience and competence and with a
university degree appropriate to the specialization of
the commission and not convicted in a felony or a
misdemeanor involving turpitude or has declare his
bankruptcy.
Third:
The regions and governorates not organized in a region
shall establish a mechanism of forming the investment
commission of the region and the governorate and
removing the Commission’s members in case he/she does
not adhere to the standards and charters of the
Commission in a way which is not in conflict with the
provisions of this law.
Fourth:
The Investment Commissions of the regions and
governorate shall coordinate their work with the
National Commission for Investment, and shall coordinate
and consult with local governments regarding investment
plans and facilities.
Fifth:
The regions and governorates commissions shall draw up
their investment
plan in a way that does not contradict with
the federal investment policy and shall
prepare list of the investment opportunities
in the areas that are subject thereto,
with initial data about these projects and
offer it to those wishing to invest.
Sixth:
The region’s Commission shall be connected to the Prime
Minister of the
region and is subject to the scrutiny of the
region’s Council. The governorate
commission shall be connected to the Governor
and is subject to the scrutiny of
the governorate council in way that does not
contradict with the provisions of this
law.
Seventh:
Regions and Governorates Commissions board of directors
shall convene
upon an invitation from their chairman. The
quorum of convening and adopting
resolutions and recommendations shall be
determined by absolute majority. The
conduct of work shall be organized by by-laws
issued by the Commission.
Article 6
In
addition to ordinary correspondence, the Commission may
adopt electronic mail with the official entities
connected with the work and activity of the Commission
through local networks or the Internet according to
guidelines set by the Commission.
Article 7
-
The Commission shall
accept investment license requests for projects
whose capital is not less than the minimum amount
determined by the Council of Ministers or the
Council of Ministers of region as the case, by a
regulation issued based on a proposal by the
Commission.
-
The Commission must
obtain the approval of the Council of Ministers
before granting the license if the value of the
investment project is more than two hundred and
fifty million dollars.
-
The Commission shall
make its final decision concerning the requests of
investment license within a period not exceeding
(45) forty five days from the date of filing a
request.
-
The decisions of the
Commission regarding the approved investments
projects shall be obligatory for the purposes of
this law.
Article 8
The
Commission shall have an independent annual budget whose
revenues shall be made up of its allocated amounts in
the State General Budget.
Article 9
The
Commission shall promote investment by working on the
following:
First:
Building confidence in the investment environment,
identifying investment opportunities, and promoting and
stimulating investment in them.
Second:
Simplifying the procedures for registration, issuing of
investment projects licenses, and following up on
existing projects and giving them priority in processing
with the official entities. Completing the procedures of
answering investor requests and obtaining the required
approvals for the investor and the project.
Third:
Establishing one window at the National Commission for
Investment and the Regions and Governorates Commissions,
which includes authorized representatives from the
ministries, and members nominated by the Councils of the
regions and governorates as the case and the concerned
authorities to undertake issuing licenses and obtain the
approvals of other authorities in accordance with the
law.
Fourth:
Providing advice, information, and data to investors and
issuing special manuals in this regard.
Fifth:
Setting forth and implementing programs to promote
investment in different areas of Iraq in order to
attract investors.
Sixth:
Facilitating the allocation of the needed lands and
renting them out for establishing projects for a sum to
be determined by the Commission in coordination with the
concerned authorities.
Seventh:
Establishing secure and free investment areas with the
agreement of the Council of Ministers.
Eighth:
Encouraging
Iraqi investors (residing in Iraq) through providing
them with easy loans and financial facilities in
coordination with the Ministry of Finance and with the
assistance of Banking Institutions, provided that the
investor obtaining the loan shall employ a number of
unemployed Iraqis proportional with the volume of the
loan.
Ninth:
Any other tasks related to its work and assigned by the
Council of Ministers.
Chapter Three
Privileges and
Guarantees
Article 10
The
Investor irrespective of his/her nationality shall enjoy
all privileges, facilitations and guarantees and shall
be subject to the obligations stated in this law. The
Iraqi and foreign investor shall have the right for, the
purposes of housing projects, the use of the land for a
sum to be determined between him and the land owner
without land speculation according to conditions set
forth by the National Commission for Investment and the
approval of the Council of Ministers. The Commission
shall facilitate the allocation of the required lands
for the housing projects. The housing units shall be
allocated for ownership by the Iraqis after the
completion of the project.
Article
11
The
investor shall enjoy the following benefits:
First:
The investor shall have the right to take out the
capital he brought into Iraq and its proceeds in
accordance with the provisions of this law and pursuant
to the instructions of the Central Bank of Iraq in an
exchangeable currency after paying all his taxes and
debts to the Iraqi Government and all other authorities.
Second:
The foreign investor shall have the right to:
A.
Exchange shares and bonds listed in the Iraqi Stock
Exchange.
B.
Form investment portfolios in shares and bonds.
Third:
Renting or leasing lands needed for the project for the
term of the investment project, provided that it does
not exceed 50 years renewable with the agreement of the
Commission, and provided that the nature of the project
and its benefit for the national economy is taken into
consideration when determining the period.
Fourth:
Insuring the investment project with any foreign or
national insurance company it deems suitable.
Fifth:
Opening accounts in Iraqi or foreign currency or both at
a bank inside or outside Iraq for the licensed project.
Article 12
This law shall guarantee the following for the investor:
First:
Priority in recruitment and employment shall be given to
Iraqi workers. The right to employ and use non-Iraqi
workers in case it is not possible to employ an Iraqi
with the required qualifications and capable of
performing the same task in accordance with guidelines
issued by the Commission.
Second:
Granting the foreign investor and non-Iraqis working in
the investment projects the right of residency in Iraq
and facilitating his/her entry and exit to and from
Iraq.
Third:
Non-seizure or nationalization of the investment project
covered by the provisions of this law in whole or in
part, except for projects on which a final judicial
judgment was issued.
Fourth:
Non-Iraqi technicians and administration employees
working in any project shall have the right to transfer
their salaries and compensations outside Iraq in
accordance with the law after paying their dues and
debts to the Iraqi government and all other entities.
Article 13:
Any
amendment to this Law shall not have any retroactive
affect regarding the guarantees, exemptions, and rights
recognized by this Law.
Chapter Four
Investor Obligations
Article 14:
The
investor shall observe the following:
First:
To notify the National Commission for Investment (inserted
in handwriting ),
the Region or Governorate Commission in writing
immediately after the installation and equipping of the
fixed assets for the purposes of the project and the
date of the beginning of commercial activity.
Second:
To keep proper records audited by a certified accountant
in Iraq in accordance with the law.
Third:
To provide an economic and technical feasibility study
for the project and any information, data or documents
required by the Commission or other competent
authorities regarding the budget of the project and the
progress made in its execution.
Fourth:
To keep records of the project’s duty-free imported
materials in accordance with the provisions of this Law
and specifying the depreciation periods of these
materials.
Fifth:
To protect the safety of the environment and to adhere
to the valid quality control systems in Iraq and
international regulations accredited in this field, also
the laws related to security, health, public order and
values of the Iraqi society.
Sixth:
To adhere to
the valid Iraqi laws regarding salaries, vacations, work
hours and conditions and others as a minimum.
Seventh:
Commitment to the correspondence of the work progress
schedule submitted by the investor with reality provided
that the time difference shall not exceed six months,
and that the National Commission for Investment shall
set forth punitive conditions in case of exceeding the
six-month period and that the Commission shall have the
right to withdraw the license.
Eighth:
To train and
rehabilitate its Iraqi employees as well as raising
their efficiency, skill and capabilities. Priority in
employment and recruitment shall be given to the
Iraqis.
Chapter Five
Exemptions
Article 15
First:
The project that has obtained an investment license from
the Commission shall enjoy exemption from taxes and fees
for a period of (10) ten years as of the date of
commencing commercial operations in accordance with the
areas of development defined by the Council of Ministers
at the suggestion of the National Commission for
Investment based on the degree of economic development
and the nature of the investment project.
Second:
The Council of Ministers shall have the right to propose
draft laws to extend or grant exemptions in addition to
the exemptions stipulated in paragraph (First) of
this Article, or provide incentives, guarantees or other
benefits to any project or sector or region and for the
years and percentages it deems appropriate in accordance
with the nature of the activity, its geographical
location and its contribution to manpower employment and
its effect on driving the economic development, and for
considerations of national interest.
Third:
The National Commission for Investment has the right to
increase the years of tax and fees exemption in a way
directly proportional to the increase in the Iraqi
Investor share in the project to reach fifteen years if
the Iraqi Investor share in the project was more than
50%.
Article 16
If
the project is moved during the granted period of the
exemption from a development area to another, the
project shall receive, for the purposes of the exemption
mentioned in paragraph (First) of Article (15)
during the remaining term, the treatment of the projects
in the development areas it is moving to, provided that
the Commission is informed of such move.
Article 17
The
project that obtains an investment license shall also
enjoy the following:
First:
Assets imported for the purposes of
the investment project shall be exempted
from fees, provided that their entry
to Iraq is made within (3) three years
from the date of granting the
investment license.
Second:
The imported assets
required for the expansion, development or modernization
of the project shall be exempted from fees in case they
led to an increase in the designed capacity, provided
they are brought in within three years from the date of
notifying the Commission of the expansion or
development. Expansion, for the purposes of this
law, shall mean adding fixed capital assets aimed at
increasing the designed capacity of the project in
commodities or services or materials by a percentage
exceeding (15%) fifteen percent. Development, for
the purposes of this law, shall mean replacing project
machines with more developed ones, totally or partially
or making a development on the standing devices and
equipments of the project by adding new machines and
devices or parts thereof with the aim of raising the
productive efficiency or improving and developing the
quality of the products and services.
Third:
Spare parts imported for the purposes of the project
shall be exempted from fees if the value of these parts
does not exceeded (20%) twenty percent of the fixed
assets value, provided that they are not be used for any
other purpose.
Fourth:
Hotels, tourist institutions, hospitals, health
institutions, rehabilitation centers and educational and
scientific organizations projects shall be granted
additional exemptions from duties and taxes on their
imports of furniture, furnishings and requisites for
renewing and updating purposes at least once every four
years, provided that these items are brought into Iraq
or used in the project within (3) three years from the
date of the approval decision of the Commission on the
import lists and their quantities, and provided that
these items are not used for purposes other than the
imported purposes.
Article 18
If
it is found that the fixed assets exempted, in whole or
in part, from taxes or fees were sold in violation of
the provisions of this law or were used in anything
other than the project or for purposes other than the
authorized purposes, the investor must pay the taxes,
fees, and fines incurred pursuant to the law.
Chapter Six
Procedures for Granting
Investment and
Project Establishment
License
Article
19
First:
The investor shall obtain the license in addition to
obtaining the rest of the licenses for the purpose of
enjoying the privileges and exemptions provided by the
Commission.
Second:
The Commission shall grant the license for investment or
project formation based on a request submitted by the
investor according to conditions facilitated and
prepared by the Commission. The request submitted by the
investor shall include the following:
A.
Filling a request form prepared by the Commission
B.
Financial competency from an accredited bank
C.
Projects performed by the investor inside or outside
Iraq
D.
Details of the project intended to invest in and its
economic feasibility.
E.
A timetable for completing the project.
Article 20
First:
The Commission must issue the establishing license
through establishing one window in the region or the
governorate not organized in a region that includes
authorized representatives of the ministries and
relevant bodies. The Commission shall grant project
formation license and obtain approvals from the entities
in accordance with the law.
Second:
The Commission must help the investor to obtain licenses
by approaching the competent authorities and exploring
the opinions of the entities concerning the issuance of
the formation license. These entities must issue the
decision to reject, approve or request amendment within
15 days from the date of being notified. The failure to
reply from the entity from which the opinion is
solicited shall be deemed as an approval and in case of
a rejection there must be cause for it.
Third:
In case of disagreement between the National Commission
for Investment decision and the other relevant entity
regarding the granting of the license other than the
Region’s Commissions, the dispute shall be brought
before the Prime Minister for settlement.
Fourth:
In case the request for registration is rejected, the
requestor may file a complaint to the Chairman of the
region or the governorate Commission concerned within
(15) fifteen days after receiving
notification of the rejection decision. The Chairman of
the Commission concerned shall take a decision
concerning the complaint in question within a period of
seven days. The petitioner may appeal the decision of
the Chairman of the Commission concerned rejecting his
complaint to the authority to which the Commission
concerned is connected to within 15 days from the date
the complaint’s rejection and its decision is deemed
final.
Chapter Seven
General Provisions
Article 21
The
project capital subject to the provisions of this law
shall be made up of the following:
First:
Cash transferred to Iraq through financial banks and
companies or any other legal means with the aim of
investing it for the purposes of this law.
Second:
The in-kind assets and incorporeal rights imported to
Iraq or purchased from the local markets by the cash
transferred into Iraq:
A.
In-kind assets related to the project.
B.
The machinery, tools, equipment, buildings,
constructions, transportation means, furniture and
offices appliances required for establishing the
project.
C.
The incorporeal rights that include patents, registered
trade marks, technical know-how, engineering services,
administrative and marketing services and the similar.
Third:
Profits, proceeds and reserves resulting from the
capital invested in Iraq in the project if the capital
of such a project was increased or was invested in
another project covered by the provisions of this law.
Article
22
The
foreign investor shall enjoy additional privileges in
accordance with international agreements signed between
Iraq and his country or multilateral international
agreements which Iraq has joined.
Article
23
If
the project ownership is transferred during the granted
period of the exemption, it shall continue to enjoy
granted exemption, facilities and guarantees until the
end of that period, provided that the new investor
continue to work on the project in the same
specialization or in another, with the approval of the
Commission. The new investor must take the place of the
former investor in the rights and obligations consequent
to the provisions of this law.
Article
24
First:
The investor,
with the approval of the Commission, may sell exempted
fixed assets or relinquish it to another investor
benefiting from the provisions of this law, provided
that he uses them in his project.
Second:
The investor, after informing the Commission, may sell
the exempted fixed assets to any person or other project
not subject to the provisions of this law after paying
the outstanding fees and taxes.
Third:
The investor, with the approval of the committee, may
re-export the exempted fixed assets.
Article 25
In
the event two or more companies or enterprises merge,
the new company or entity resulting from the merger must
set up separate accounts for each project before the
merger in order to register and apply exemptions and
facilitations stipulated in this law during the
remaining period of the exemption.
Article 26
Any
project approved in accordance with the provisions of
the previous applicable laws shall continue to benefit
from all exemptions granted to it pursuant to that law
and until the expiration of the exemption period and
under the same terms.
Article 27
Disputes arising between parties who are subject to the
provisions of this law shall be subject to the Iraqi law
unless otherwise agreed, contrary to the cases that are
subject to the provisions of the Iraqi law exclusively
or the jurisdiction of Iraqi courts.
1.
Disputes arising from the work contract shall
exclusively be subject to the provisions of the Iraqi
law and the jurisdiction of Iraqi courts. Non-Iraqi
laborer shall be exempted if the work contract
stipulated otherwise.
2.
If parties to a dispute are non-Iraqis and in disputes
not arising from a crime, the opponents may agree on the
law to be applied, the competent court or any other
agreement to resolve their dispute.
3.
If a dispute between the partners or between the owner
of the project and others in a project subject to the
provisions of this law resulted in the stoppage of work
for a period exceeding three months, the Investment
Commission may withdraw the license and ask the owners
of the project to settle the dispute within a period not
to exceed three months. If such period elapsed without
settling the dispute between the partners or between the
owner of the project and others, the commission may take
legal measures to liquidate the project and notify the
owner of the project or one of the partners of such
action. The liquidation money shall be deposited in one
of the banks after paying the dues of the State or any
other dues after final judgment of their entitlement is
rendered.
4.
If one of the parties to a dispute is subject to the
provisions of this law, they may, at the time of signing
the agreement, agree on a mechanism to resolve disputes
including arbitration pursuant to the Iraqi law or any
other internationally recognized entity.
5.
Disputes arising between the Commission or any
governmental entity and any of those subject to the
provisions of this law on matters not related to
violations of one of the provisions of this law shall be
subject to Iraqi law and courts on civil matters. As for
commercial disputes, parties may resort to arbitration
provided that such an arrangement is stipulated in the
contract organizing the relationship between parties.
Article 28
In
case the investor violates any of the provisions of this
law, the Commission shall have the right to warn the
investor in writing to remove the violation within a
specific period. In case the investor does not remove
the violation within the specified period, the
Commission shall summon the investor or who represents
him to state his position and grant him other respite to
settle the issue. Upon repeating or not removing the
violation, the Commission shall have the right to
withdraw the investor’s license it issued and order
stoppage of work on the project and retain the State’s
right to deny the investor the granted exemptions and
privileges from the date of the violation and allow
others to retain their rights to demand compensation for
the damage caused by this violation, without breaching
any punishments or other compensations stipulated in the
applicable laws.
Article 29
All
areas of investments shall be subject to the provisions
of this law except:
First:
Investment in Oil and Gas extraction and production.
Second:
Investment in
banks and insurance companies sectors.
Article 30
The
Council of Ministers shall have the right to:
First:
Issue regulations to facilitate the implementation of
the provisions of this law.
Second:
Issue bylaws defining the Commission’s formations,
divisions, tasks, process of its work, its authorities,
financial affairs, employee affairs and any others
matters.
Article 31
The
Committee may issue instructions to facilitate the
implementation of regulations issued by the Council of
Ministers pursuant to the provisions of this law.
Article 32
The
Provisions of this law shall be applied to the existing
and operating projects of the mixed and private sectors
which have commenced before the issuance of this law and
upon a request from its management and the approval of
the Commission with no retroactive effect.
Article 33
No
text shall be valid which contradicts the provisions of
this law.
Article 34
The
(dissolved) CPA Order No. 39 of 2003 shall be revoked.
Article 35
The Arab Investment Law no (62) of 2002 issued by the
dissolved Revolution Command Council shall be annulled.
Article 36
This Law shall enter into force from the date of its
publication in the Official Gazette.
Justifying
Reasons
For
the purpose of driving the process of economic and
social development and bringing technical and scientific
experience and developing human resources, and for
creating work opportunities for the Iraqis by
encouraging investments and supporting the process of
establishing investment projects in Iraq and their
expansion and development at various economic levels and
by granting privileges and exemptions for these
projects, this law is legislated.